How to Write a Title and Survey Objection Letter

After getting a property under contract, the buyer has an opportunity to “look under the hood” and negotiate with the seller before fully committing to the purchase.

Many people are aware of the option period, which allows the buyer to conduct a physical inspection of the property and identify major capital expenditure issues such as HVAC, roofing, plumbing, and other concerns. However, fewer buyers realize that, in addition to the option period, they are also given time to review the title commitment and make objections to the proposed title insurance coverage.

A title company’s primary responsibility is to ensure that the seller owns the property and has the legal authority to sell it, allowing the buyer to receive clear title. During the title search process, the title company typically:

• Reviews recorded liens

• Verifies the seller’s marital status

• Identifies easements and encumbrances

• Reviews ownership records

• Checks for other issues affecting title

As a result of this investigation, the title company prepares an initial title commitment.

Understanding the Title Insurance Process

To understand a title objection letter, it is helpful to first understand the title insurance process.

Generally, there are three stages of title diligence for buyers and lenders:

1. Title Commitment

2. Title Objection Letter

3. Title Insurance Policy

   
   

Before a title insurance policy is issued, the buyer or lender typically seeks the broadest possible coverage to protect the property’s value or the lender’s security interest.

The title company provides a title commitment that outlines:

• Proposed policy coverage

• Coverage exceptions

• Curative requirements before closing

During the title review period, the buyer or lender may submit a title objection letter to dispute or negotiate specific exceptions, requirements, or coverage limitations contained in the title commitment.

Understanding the Title Commitment

The title commitment is generally divided into several schedules.

Schedule A

Schedule A contains the basic transaction information, including:

• Buyer and seller information

• Property description

• Purchase price

• Loan information

• Policy amounts

Schedule B

Schedule B lists exceptions to title insurance coverage. These are items the title company will not insure against unless they are removed or modified.

Schedule C

Schedule C contains items that must be addressed before closing. Think of this as the title company’s “to-do list.”

Examples may include:

• Releasing liens

• Obtaining missing signatures

• Recording documents

• Resolving ownership issues

Schedule D

Schedule D provides disclosures and information regarding ownership of the title company and title insurance underwriters.

Most title objection letters focus on issues identified in Schedules B and C.

What Can Be Included in a Title Objection Letter?

Title objection letters should be specific and detailed.

Common objections may include:

• Expired easements

• Invalid easements

• Unenforceable easements

• Leases affecting the property

• Subordinate liens

• Tax assessments

• Lack of legal access

• Mineral interests

• Restrictive covenants

• Coverage exceptions listed in Schedule B

The purpose of the objection letter is to request clarification, removal, modification, or resolution of these matters.

Survey Objections

Survey objections typically focus on physical issues affecting the property, including:

• Boundary disputes

• Acreage shortages

• Boundary overlaps

• Encroachments

• Improvements crossing property lines

• Access issues

Survey concerns should be specifically identified and supported by the survey whenever possible.

Who Receives the Objection Letter?

The objection letter is generally directed to:

• The seller when submitted by the buyer; or

• The buyer when submitted by a lender

A copy should also be provided to the title or escrow company.

The parties involved in the transaction are responsible for completing any required curative actions.

Can Title Issues Be Resolved?

Many exceptions listed in Schedules B and C can be eliminated or addressed before closing.

Some issues may simply require:

• Additional documentation

• Lien releases

• Corrective deeds

• Amendments to title coverage

Other exceptions may be accurate and unavoidable but can be addressed through curative measures that satisfy the buyer, lender, or title company.

If an issue cannot be removed, the title commitment and survey provide disclosure so that all parties can make informed decisions about proceeding with the transaction.

When Title Problems Prevent Closing

Occasionally, significant title defects cannot be cured.

In these situations, closing may not be possible.

Buyers should carefully review the purchase contract to determine whether they are entitled to receive their earnest money back if title defects cannot be resolved.

If the parties still wish to move forward with the transaction, an experienced real estate attorney may be able to recommend solutions for clearing title or mitigating risk.

Need Help Reviewing a Title Commitment?

Reviewing a title commitment and survey can be complex. An attorney can help identify potential issues, prepare title and survey objection letters, and recommend strategies to protect your interests before closing.

To learn more or to have your title commitment reviewed, contact Texas Real Estate & Business Law Firm PLLC.

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